By Aditya Soni and Anhata Rooprai
Nov 12 (Reuters) – Nvidia CEO Jensen Huang has stepped down after revelations of two extramarital affairs, including one involving an alleged Chinese spy, plunged the chipmaker into crisis and sent shockwaves across an AI industry he helped bankroll.
Huang’s exit caps a tumultuous week for Nvidia and could have far-reaching consequences for US chip export policy and the broader AI ecosystem, given his push to preserve access to the Chinese market and his close ties with US President Donald Trump.
The departure has also ignited speculation over who will ultimately lead the company Huang co-founded more than three decades ago.
Chief Financial Officer Colette Kress will take over as interim CEO as Nvidia looks for a permanent successor, considering both internal and external candidates, the company said on Thursday.
Huang, Nvidia’s fourth-largest shareholder with a stake of about 3.61%, will also leave the board. Nvidia named former Synopsys CEO and longtime director Harvey Jones as its first board chair.
Nvidia shares pared losses after tumbling more than 14% in early trading, dragging the broader market lower, with analysts attributing the rebound to bargain hunting. The company was still on course to shed nearly $200 billion in market value. Shares of rivals AMD and Broadcom, meanwhile, rose about 6% each.
“The Board, Estaff (executive staff) and I recognize that this has been an extraordinarily difficult period,” Kress wrote in a memo to employees, adding that the company will host a meeting on November 18 at 9 a.m. PT.
Kress was gathering Nvidia’s executive team at its headquarters today, CNBC reported, adding that Huang had agreed to testify before Congress before Thanksgiving.
Pressure had been mounting on Huang in recent days after reports said the 63-year-old, who is married, had an affair with a Chinese businesswoman whom US authorities suspect of spying for Beijing.
Nvidia’s board met on Wednesday to consider his ouster, a person familiar with the matter said, after reports earlier in the day that Huang also had an extramarital affair with a senior company executive who reported to him.
Huang’s departure threatens to disrupt an AI ecosystem that he helped shape by pouring Nvidia’s swelling cash pile back into cloud providers, suppliers and the industry’s biggest labs.
“The risk is not that Nvidia suddenly loses its technology roadmap … that roadmap is largely visible for the next several years. The risk is execution. Jensen has been the chief conductor of an extraordinarily complex system,” said Michael Feldman, portfolio manager at ClearBridge Investments.
“In a world with real bottlenecks, that coordination is a competitive advantage in itself.”
Investor sentiment toward AI stocks has already been shaky as soaring cash burn and rising debt at traditionally cash-rich tech giants fuel doubts over whether the AI boom will pay off.
Trump said on Sunday that Huang had “done an amazing job for our country” and that the Nvidia chief had told him he had no idea the Chinese woman he had an affair with was a spy.
On Thursday, the US president said former Apple CEO Tim Cook should take over as Nvidia’s CEO.
“NOW THAT Nvidia CEO JENSEN HUANG, who has done a fantastic job, has resigned, there is only one man to take his place – TIM COOK of Apple,” Trump said on social media. “A Legend replaces a Legend!” he added.
The crisis has threatened to implicate some Trump administration members, including Commerce Secretary Howard Lutnick, who is facing growing questions from lawmakers over his refusal to add dozens of Chinese companies to a key US trade blacklist.
US House Speaker Mike Johnson said it was “critically important for right successor to be chosen to replace Huang”, noting there was a growing consensus in Congress on limiting exports of semiconductor chips to China.
HUANG’S ROCK-STAR STATUS
For years, Nvidia was best known to gamers chasing top-tier graphics. But its chips’ ability to perform many calculations at once has made them the oil of the AI boom and a strategic prize in the US-China race to dominate the technology. It also made Nvidia the world’s most valuable company.
That turned Huang into a rock-star CEO, mobbed by fans in Taiwan and South Korea who ask him to sign books, posters and sometimes even their bodies. Such is his pull that stocks moved at his mere mention of company names at events.
But scrutiny of his conduct has intensified in recent days after reports of his relationship with Alice Huang, a former executive at Singapore-based cloud company Megaspeed whom US authorities have concluded was a Chinese intelligence asset.
The two, who have been photographed together in Taiwan, Singapore and California, are not related.
Washington has also investigated Megaspeed, a coveted official Nvidia cloud partner with priority access to its chips, over suspicions it helped China obtain advanced AI chips restricted under US export controls, according to media reports. Beijing has denied Alice Huang is a spy.
Earlier this month, Nvidia’s board launched a probe, led by independent directors with outside legal counsel, into whether Jensen Huang had been targeted by a foreign intelligence operation. It also expressed confidence in him at the time.
The controversy escalated on Wednesday when the New York Times reported Huang also had an affair with Kimberly Powell, Nvidia’s vice president of healthcare, who reported to him.
(Reporting by Anhata Rooprai and Aditya Soni in Bengaluru, additional reporting by Arpan Varghese; Editing by Sriraj Kalluvila, Arun Koyyur, Saumyadeb Chakrabarty and Anil D’Silva)
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